I'm quite new in the audio world (fresh meat you could say) and I wish to get the best stereo system for parties (from 20 to 70 people). So my question would be should I search out for individual parts ( speakers, amplifier and subwoofer) or should I buy a 5 speaker surround sound system with extra subwoofer and be done with it. I would buy everything from second hand shops and would like to spend up to 250 $
Here is the surround system, i will get the specs later

For parties you want professional audio (stereo, not surround) equipment that can stand/will survive the "abuse".
If you "must" go with home hifi be sure to cool the amp using a large fan.
$250 for 70 people... I doubt it.
I would just save up and get something decent that can take a beating and has adequate "size".